Teacher compensation study recommends numerous improvements

T​​​​​​he Hawaiʻi State Department of Education should consider implementing automatic step pay increases for teachers, create a dedicated human resources help desk to provide accurate information on pay, benefits, and leave policies, and develop a compensation philosophy for all educators, which already exists for high-level HIDOE administrators.

Those are among the recommendations from an in-depth, independent study of the state’s teacher compensation system. Conducted by the national consulting firm Experience Management Institute (EXMI), the Compensation Impact Study provides a detailed analysis of teacher pay structures, equity and competitiveness, along with recommendations for modernization.

More than 4,200 teachers and administrators participated in the study through surveys, interviews and listening sessions. Their insights helped shape a set of practical, research-based recommendations.

Among the key findings:

• While the average teacher salary is slightly above the market midpoint, base pay is a top concern due to the high cost of living. While the study claimed that teacher salaries are competitive in the market, and the creation of Class VIII provides an opportunity to further increase compensation, 94% of the teachers who took the study’s survey said their salaries do not keep up with the cost of living in Hawai‘i, and are a significant source of stress and dissatisfaction with their wages.
• Retention remains a challenge. Nearly 40% of teachers surveyed said they may leave the classroom within three years, highlighting the need for stronger long-term strategies.
• Salary progression lacks predictability. Teachers report uncertainty about how and when pay increases occur, as step movements are negotiated, and they lack familiarity with advancement policies that increase salary based on relevant education and training.
• Shortage differentials have varying impacts. The highest levels of differentials for teaching special education ($10,000) or in specific hard-to-staff locations ($8,000) improved teacher retention. However, differentials at lower amounts ($3,000 and $5,000) did not have an impact on recruitment or retention. Additionally, many teachers are unclear about the eligibility criteria.
• Compression fixes had limited reach. In 2022, the state invested $55 million to address salary compression among teachers. Most veteran teachers received a one-time salary adjustment to align their compensation with years of recognized service or a one-time bonus for teachers at the top of the salary schedule. However, many experienced educators felt that their full-service time was not acknowledged and remained unsatisfied with their compensation. Teachers raised concerns that the compression fix ignored the lifetime earnings lost prior to the adjustment.
• Communication and transparency are significant challenges. Inconsistent information and communication gaps across compensation, benefits, and HR systems create confusion, mistrust, and reduce impacts of efforts for improvements.
• Teachers trust HSTA. Because of the lack of consistent and transparent information, teachers frequently seek out and rely more on HSTA than the DOE for information about compensation and benefits.

Recommendations include automatic step increases, clear compensation philosophy

The 100-page study contained nine pages of detailed recommendations, which included:

Establishing a clear compensation philosophy for educators
To ensure fairness, transparency, and sustainability in educator pay, the Hawaiʻi State Department of Education should establish a formal compensation philosophy that clearly defines its guiding principles for teacher compensation. While such a philosophy was recently adopted by the Board of Education for the superintendent and deputy superintendents, none currently guides teacher compensation. Developing one collaboratively would align pay practices with broader workforce goals and could strengthen trust and improve consistency.

Once a clear compensation philosophy is established, the study emphasized the need to align all related policies, processes, and structures with that philosophy to ensure consistency and credibility. It noted that misalignment between stated values and actual practices can create confusion and erode trust. Recommendations included conducting an audit of current pay systems, clarifying step and movement rules, standardizing procedures, and establishing clear oversight and accountability structures—all of which would help build a more coherent, equitable, and strategic compensation system that supports both organizational priorities and educator expectations.

Salary structure recommendations included:

Considering automatic step increases
Automatic step progression is the norm across most states and is strongly linked to teacher expectations of fairness. Hawaiʻi’s negotiated step movement creates confusion and unpredictability. A shift to automatic steps would reinforce trust and potentially improve attrition.

Considering adjustments to initial placement, recognized experience
Varied experiences among out-of-state, charter and industry experience undermine teachers’ perceptions of fairness.

• Review current placement rules and credit policies for out-of-state, military, charter and relevant industry experience.
• Consider longevity incentives for teachers at the top of the scale (e.g., annual stipends, recognition bonuses or professional growth awards) as an alternative to adding steps.
• Establish a formal placement review and appeals process with clear timelines,
  documentation requirements, and oversight to resolve errors or inconsistencies.

Aligning incentive and supplemental pay programs
Align any stipends, differentials or bonus programs with broader workforce goals and ensure they are administered fairly and transparently. Where possible, data should be used to assess effectiveness via regular formal review cycles. Re-evaluation of eligibility criteria and recalibration of differential amounts should be considered. However, the study also recognized the need to carefully manage any such transitions or changes with care and sensitivity as many teachers have integrated such additional compensation into a meaningful part of their household finances.

Improving communication, transparency
To better support Hawaiʻi’s educators, the study recommended improving communication, planning, and data systems around compensation. This recommendation comes as a result of teachers’ and administrators’ feedback that consistently points to confusion, inconsistent messaging, and limited access to reliable information and compensation policies and procedures. The study also cited unclear, fragmented communication as a cause of educators’ diminished perception of fairness.

To build trust, the study recommended HIDOE create a centralized HR help desk, an online “total rewards” portal, and regular information sessions to help teachers understand their pay, benefits, and advancement opportunities. Training for administrators would ensure consistent, accurate messaging across schools.

Next, the study calls for a multi-year compensation strategy roadmap that clearly outlines priorities, timelines, and funding needs over three to five years, giving educators predictability and confidence in the state’s long-term plans for fair and competitive pay.

Finally, it recommends addressing systemic barriers, including modernizing data and HR systems to reduce errors, speed up reimbursements, and give teachers real-time access to accurate pay and service information. Together, these steps would build trust, improve access to information, and create a more transparent, equitable compensation system that values and supports Hawaiʻi’s educators.

Joint HSTA-HIDOE workgroup to address pay study’s findings, recommendations

While matters subject to collective bargaining will need to be addressed in the 2027 HSTA contract negotiations, the HSTA and HIDOE have agreed to set up a joint workgroup to discuss the challenges highlighted by the study and EXMI’s recommendations, and to prioritize actionable steps to strengthen information sharing and communication to support employees.

HSTA President Osa Tui, Jr. thanked state lawmakers for prompting the pay study, noting that it happened as a result of a State Senate resolution from 2024.

“The study’s findings help guide and strengthen HSTA’s efforts, from our commitment to work alongside the HIDOE on a new joint HSTA–HIDOE committee on these issues, to our preparation for successor contract bargaining in school year 2026–2027,” Tui said.

“Real and lasting pay improvements for Hawaiʻi’s teachers are critically needed. The timing couldn’t be more urgent, as teachers nationwide are now paid on average more than 26% less than other professionals, which is a record low. HSTA will keep fighting at the Legislature for funding of annual step increases and continue pushing to ensure Hawaiʻi’s educators are not only fully supported in their workplaces, but will fight to make sure they are paid what they deserve,” Tui added.

EXMI presented some of its teacher compensation findings and recommendations to the Board of Education on Oct. 9. The presentation is available here, and the full study can be accessed here.